SoundHound AI Faces Critical Support as Earnings Loom Amidst Volatile Stock Performance

Technical Analysis

SoundHound AI (SOUN) closed at $10.69 on July 29, 2025, marking a notable intraday decline of 4.89%. The stock’s trading range was between $10.64 and $11.28, hovering close to its 50-day moving average of $10.65 and just below the 200-day moving average of $10.77. With an RSI of 34, the stock is approaching oversold territory but has not yet reached a critical bottom signal. MACD remains positive (0.91), indicating underlying medium-term momentum despite recent volatility. The average true range (ATR) at approximately $8.09 suggests substantial price volatility, though this figure seems abnormally high relative to price levels and may reflect recent wide swings. Key technical support is identified at $10.11, while resistance is evident near $11.01. Trading volume on July 29 stood at 8.88 million, well below the average volume of 40.84 million, signaling lower liquidity and potential indecision ahead of the earnings announcement on August 7. Near-term price action for July 30 is likely to test support near $10.11 with resistance overhead at $11.01; a break below support could push the stock toward its recent lows, while any bounce might be capped by technical resistance.

Fundamental Analysis

SoundHound AI’s fundamentals reflect a company in aggressive growth mode with operational challenges. The trailing twelve months EPS is negative at -$0.61, and the P/E ratio is correspondingly negative at -17.47, indicating ongoing unprofitability. However, revenue growth is robust, with Q1 2025 posting a 151% year-over-year increase to $29.1 million and full-year revenue projected at $159.6 million. The company’s AI platforms, Polaris and Amelia, demonstrate significant technology advances delivering faster query response times and materially improved accuracy metrics, which support accelerating enterprise adoption. Despite these growth metrics, the stock has declined approximately 40% year to date after spectacular gains in 2024, reflecting market skepticism about near-term profitability and valuation. The current market capitalization of about $4.28 billion is substantial relative to revenue, implying high expectations priced into the stock. Consensus analyst price targets settle tightly at $13.00 with a “Buy” consensus—4 analysts favor buy, 4 hold, and none recommend sell—indicating some cautious optimism balanced by valuation concerns.

Intrinsic Value and Long-Term Investment Potential

The intrinsic value of SOUN is challenging to pinpoint given the negative earnings and high volatility, but discounted cash flow (DCF) models would require sustained revenue growth with improving margins to justify the current market cap. SoundHound’s positioning in the rapidly expanding global AI market, projected to reach $4.8 trillion by 2033, provides significant long-term growth potential. Innovations driving faster and more accurate AI solutions in voice recognition and natural language processing may translate into lasting competitive advantages and enterprise customer traction. However, profitability remains elusive, and execution risk persists in the highly competitive AI sector. The upcoming earnings announcement on August 7 will be a critical catalyst to evaluate margin progression and revenue guidance. For long-term investors with a high-risk tolerance, SOUN offers exposure to a growth-oriented AI innovator. Conversely, caution is warranted given current negative earnings and recent price depreciation.

Stock Performance Outlook

For the next trading day (July 30), the stock is likely to remain under pressure, testing the $10.11 support level amid subdued volume and elevated short-term volatility. A failure to hold support could prompt further declines toward the $10.00 psychological threshold. Over the next week, with an earnings report looming, price movement may remain muted or volatile as traders position ahead of the August 7 release. Should the company deliver strong revenue growth and hints of margin improvement, a rally toward and above analyst targets near $13.00 could materialize. Conversely, weak guidance or profitability setbacks could extend the downtrend.

Overall Evaluation

SoundHound AI exhibits attributes of a high-growth technology stock facing transitional challenges: strong revenue growth, innovative AI products, but negative earnings and high valuation relative to current fundamentals. Technically, the stock is near critical support with below-average volume, and fundamentally, it is dependent on successful earnings delivery to regain momentum. The consensus view balances buy and hold opinions with no sell ratings, reflective of mixed market sentiment. Given these factors, the stock fits best within a Hold classification—neither a definitive sell nor an unequivocal buy—pending clearer signs of profitability and post-earnings directional confirmation.